Understanding Business Strategy Concepts Plus 3rd Edition By R. Duane Ireland – Test Bank

Chapter 10 – Innovating through Strategic Entrepreneurship

TRUE/FALSE

1. Organizations pursue innovation because it eliminates the uncertainty inherent in the competitive marketplace.

ANS: F PTS: 1 REF: Page 215 OBJ: Learning Objective 1
KEY: Comprehension
MSC: AACSB: Analytic | Management: Strategy | Dierdorff & Rubin: Managing Strategy & Innovation

2. A new way of handling payroll and benefits would be considered an administrative innovation.

ANS: T PTS: 1 REF: Page 216 OBJ: Learning Objective 1
KEY: Comprehension
MSC: AACSB: Analytic | Management: Strategy | Dierdorff & Rubin: Managing Strategy & Innovation

3. Google’s innovations come about from all three methods to innovate: internal development, cooperative relationships, and acquisitions.

ANS: T PTS: 1 REF: Page 214
OBJ: Learning Objective 4 | Learning Objective 6 KEY: Knowledge
MSC: AACSB: Analytic | Management: Strategy | Dierdorff & Rubin: Managing Strategy & Innovation

4. The process through which existing products, methods of production, or ways of managing the firm are destroyed and replaced with new ones is called “creative destruction.”

ANS: T PTS: 1 REF: Page 216-218
OBJ: Learning Objective 2 KEY: Knowledge
MSC: AACSB: Analytic | Management: Strategy | Dierdorff & Rubin: Managing Strategy & Innovation

5. Claudette is a well-educated human resources professional in the compensation area. She understands the importance of innovation in her area, and would like to be a leader of administrative innovation in her organization. Claudette is very realistic, intolerant of ambiguity, and willing to tackle projects only after they have the financial support of top management. Claudette has the personality profile of an entrepreneur.

ANS: F PTS: 1 REF: Page 218 OBJ: Learning Objective 2
KEY: Application
MSC: AACSB: Reflective Thinking | Management: Strategy | Dierdorff & Rubin: Strategic & Systems Skills

6. Identifying opportunities is a strategic process while developing the capabilities needed to exploit them is an entrepreneurial process.

ANS: F PTS: 1 REF: Page 219 OBJ: Learning Objective 3
KEY: Comprehension
MSC: AACSB: Analytic | Management: Strategy | Dierdorff & Rubin: Strategic & Systems Skills

7. Although a firm can buy ownership of another firm’s innovations and innovation capabilities, this is not considered true strategic entrepreneurship.

ANS: F PTS: 1 REF: Page 219 OBJ: Learning Objective 3
KEY: Comprehension
MSC: AACSB: Analytic | Management: Strategy | Dierdorff & Rubin: Strategic & Systems Skills

8. Proctor & Gamble’s new tooth pastes are considered incremental innovations.

ANS: T PTS: 1 REF: Page 221 OBJ: Learning Objective 1
KEY: Application
MSC: AACSB: Reflective Thinking | Management: Strategy | Dierdorff & Rubin: Strategic & Systems Skills

9. Incremental innovations are internal innovations because they build on the organization’s existing knowledge base, whereas radical innovations are external innovations because they create new knowledge

ANS: F PTS: 1 REF: Page 220-221
OBJ: Learning Objective 4 KEY: Comprehension
MSC: AACSB: Analytic | Management: Strategy | Dierdorff & Rubin: Strategic & Systems Skills

10. Radical innovations are more likely to lead to substantial improvements in a firm’s performance than are incremental innovations.

ANS: T PTS: 1 REF: Page 221 OBJ: Learning Objective 4
KEY: Comprehension
MSC: AACSB: Analytic | Management: Strategy | Dierdorff & Rubin: Strategic & Systems Skills

11. Innovating by cooperating is accomplished primarily through acquisitions.

ANS: F PTS: 1 REF: Page 221-222
OBJ: Learning Objective 5 KEY: Comprehension
MSC: AACSB: Analytic | Management: Strategy | Dierdorff & Rubin: Managing Strategy & Innovation